Fast, faster, fastest: This is the speed automakers must innovate today to stay ahead of customers' demands and market changes. To achieve this in a rapidly changing industry, the automotive industry is embracing composable solutions to tailor experiences, implement connected cars and more at high speed.
If you’re keeping track of automotive trends, you’re probably aware of how technology like AI, chatbots, connected cars and the Internet of Things (IoT) have dominated the airwaves in the last couple of years. Indeed, the automotive industry is investing in technology like never before to achieve higher efficiencies, leaner operations and supercharged customer experiences. And one such technology is none other than composable commerce.
Like other sectors, car manufacturers are pressured to keep pace with new customer behaviors, market changes and competitor moves. At the same time, many automobile brands have legacy systems to contend with that are the opposite of agile. Also, automakers usually have complex organizational structures across B2C and B2B, as well as relationships encompassing car dealers and eCommerce marketplaces for all things automotive. Add in the increased digitization expectations from “functions on demand” to car accessories and services, and automakers have a real challenge to increase revenue across units and boost customer loyalty.
Composable commerce turns these challenges into opportunities. Rather than relying on monolithic, all-in-one commerce platforms, the composable approach enables the automotive sector to assemble smaller and specialized components like search, checkout and cart that can be easily integrated, customized and even easily replaced. For businesses, this means flexibility and agility. For customers, this translates into improved services, seamless experiences across touchpoints and customizable products.
Technology trends in the automotive industry
The automotive industry is undergoing a deep technological transformation with the rise of robotics, IoT and the continued evolution of connected cars, which are essentially vehicles using digital connectivity to provide an elevated mobility experience. As a matter of fact, McKinsey revealed that 55% of auto executives ranked connected cars as one of the top two trends driving the future of mobility, ranking second only to electrification.
Rather unsurprisingly, the survey also showed that customers are as excited as execs. About half of respondents “would consider switching to a different card brand that offered smarter, better-performing in-car features,” a figure that rose from about 20% in 2014. Moreover, 69% of electric-vehicle (EV) buyers anticipate increasing their use of connectivity solutions in the future. And, as 5G and IoT become mainstream, vehicles are becoming more connected, opening a wide range of opportunities for the automotive industry at large. According to Forbes, “The automotive sector is expected to see a 30 to 35% annual growth rate in 5G adoption over the next few years. 5G will also facilitate what we term as “car as a connected living solution.”
Generative AI in the automotive industry is also helping shape the future of cars, from impacting vehicle design to predictive maintenance and in-car interactions, driving the evolution of connected cars and beyond.
More than connected cars, the purchasing journey of buying a car is moving from offline to online. Potential buyers not only perform online research for their dream cars but also turn to eCommerce sites to purchase the vehicle effectively. The full car buying experience is set to surge in the years to come, reaching between 7.1 and 7.3 million units in 2024. Another trend that sees no signs of slowing down is the automotive parts eCommerce, with 94% of consumers checking the manufacturer’s website for product information before purchasing it.
Automotive eCommerce in action
The automotive industry is increasingly embracing eCommerce to streamline operations, enhance customer experience and drive sales. Some key use cases include:
As part of the connected car ecosystem, in-car commerce is transforming the way drivers interact with their vehicles by integrating commerce functions directly into the car’s infotainment system. This innovative approach allows drivers to make purchases, manage services and access a variety of on-demand features through a digital dashboard while on the road.
Key aspects of in-car payments and commerce include the ability to purchase goods and services seamlessly from the vehicle, from ordering food for pickup or scheduling vehicle maintenance through the car’s interface. This system leverages real-time data and connectivity to offer personalized recommendations based on the driver’s location and preferences.
Functions on-demand further enhance this experience by allowing drivers to access and control various features as needed. These can range from activating premium services such as advanced navigation or streaming entertainment to adjusting vehicle settings like climate control or seat adjustments through app-based commands.
Integrating in-car commerce in 26 countries is just the beginning for Audi
As one of the world’s leading automakers, Audi is known for its commitment to innovation. But responding to changing customer requirements with a legacy commerce infrastructure hurt the company’s ability to innovate. In addition, boosting customer experiences across all digital channels, including in-car commerce, mobile apps and so on, was also increasingly difficult.
Thanks to composable commerce, Audi was able to centralize all product information, including pricing, product copy, functions and services, in one place. As a result, car dealers and customers can access the same information no matter where they engage with the Audi brand, creating a seamless experience.
With this homework done, Audi built the channels on top to engage with drivers easily, especially for its eTron range. The automaker enabled drivers to buy and activate new car functions (“functions on demand”) like car upgrades via their myAudi app. The automaker released this capability across 26 European countries.
“The Audi commerce platform has been built with three core values in its DNA: speed, adaptiveness and effectiveness. With commercetools as the backbone for our platform, we were able to build a scalable, global commerce infrastructure aligned with our values. As a result, we can now leverage new eCommerce business models at Audi in only a few weeks.”
— MATTHES KOHNDROW, PRODUCT OWNER DIGITAL BUSINESS, AUDI AG
A recent innovation is the Build your Audi experience with an interactive interface for customers to play with different versions (trim levels), a preview of the exterior (body paint finishes, alloys) and the ability to choose interior details and equipment.
Omnichannel experiences in the automotive industry are all about offering a seamless transition between online and offline interactions. This integrated approach allows customers to start their vehicle research online, exploring options, specifications and reviews at their convenience. Once they have narrowed down their choices, they can easily book test drives through the brand’s digital platforms, ensuring a smooth transition to a physical dealership (or the automaker’s concept store) when they’re ready to experience the vehicle in person.
The flexibility of the omnichannel model can also extend to the purchasing process itself. Customers can choose to complete their purchase online, utilizing secure digital platforms for transactions and virtual consultations, or finalize their purchase at a physical dealership. This adaptability ensures that customers can tailor their buying journey to their preferences, whether they value the convenience of online transactions or the personal touch of in-person interactions.
While an omnichannel approach provides a deeper connection between automaker and dealership, a digital-focused model enables car manufacturers to embrace the direct-to-consumer (D2C) sales strategy more effectively. For instance, customers can browse models, customize features and even complete purchases online. Tesla is a pioneer, but other companies like Ford and BMW have adopted similar models.
Future-proofing customer experiences with composable commerce at BMW Group
First-class products and technology are synonymous with the BMW Group — so are their customer experiences. Using composable commerce, the Group can showcase its enormous catalog of automotive products and accessories, plus integrated digital products ranging from Connected Drive to bookable services like routine maintenance checks and oil changes.
With composable commerce, new applications and services, such as installing virtual products like digital license plates, have become possible. Moreover, the flexibility of composable means the automaker can add new customer channels on the fly, which can be seamlessly integrated into other Connected Car functions, including vehicle configuration and maintenance.
6 ways how composable commerce elevates automotive eCommerce
Composable commerce allows automotive companies to design flexible, modular eCommerce solutions tailored to their specific needs. With MACH® technology under the hood, the automotive sector can harness an open, modular and scalable approach that lets them integrate best-in-class solutions for different functions, creating a more agile and customized system.
Here's how composable commerce powers the automotive sector:
Personalization: Automotive companies can integrate AI-powered product recommendation engines and personalization tools. This enables dynamic customization for vehicles, parts and services, providing customers with highly relevant suggestions based on their preferences and browsing behavior.
Scalability: Automotive eCommerce needs to handle fluctuating demand, especially during product launches or seasonal peaks. A composable, cloud-native infrastructure allows companies to scale up or down quickly to meet demand without compromising performance.
Time to market: By leveraging modular components, automotive brands can quickly introduce new digital features — such as virtual showrooms, 360-degree vehicle views or online configurators — without overhauling their entire platform. This keeps them competitive and responsive to market changes.
Seamless integration: Composable commerce enables easy integration of various services, like CRM, inventory management, payment gateways and fulfillment systems, creating a seamless end-to-end process. This ensures that automotive companies can deliver an omnichannel experience that links online research, in-store visits and after-sales services.
Flexibility for new business models: The modular nature of composable commerce helps companies quickly adopt new models like car subscriptions, flexible financing or shared mobility services, all managed through a centralized commerce platform.
Improved customer experience: Composable commerce empowers automotive companies to enhance customer journeys through personalized content, faster checkouts and tailored post-purchase services. For example, customers can track vehicle delivery, schedule maintenance and upgrade features, all within one unified platform.
In a nutshell, the automotive industry can greatly benefit from composable commerce. Businesses selling cars and accessories online are in the pole position to make digital customer experiences more fluid, optimizing the entire customer journey from product discovery and configuration to payment and checkout.
As automobile sales and loyalty programs take the digital road, composable commerce is the high-speed solution that meets the needs of an industry that never stops innovating.
Are you exploring new ways to leverage digital commerce in the automotive industry? Discover commercetools for Automotive, the composable commerce solution for car manufacturers and more.
Ankita is a product marketing professional at commercetools and is passionate about developing value-based product messaging to communicate the vision and value of their products to the market. She has lived and worked in five different countries and navigated roles in the consulting and financial services industry before transiting into eCommerce post MBA.
Manuela Marques Tchoe is a Content Writer at commercetools. She was a Content and Product Marketing Director at conversational commerce provider tyntec. She has written content in partnership with Facebook, Rakuten Viber and other social media platforms.